Copper is on a roll at the moment and the grade of the deposits where it is mined is becoming increasingly important within the industry.
The use of the red metal in low carbon and green tech is keeping prices high while global supply runs short, which means the giant copper miners are reducing cut-off grades to increase reserves. According to a note by Equity Research last month, cut-off grades at porphyry deposits - which supply around 80% of the world’s mines copper - have dropped to as low as 0.25% per tonne, while the average grade mined globally is 0.53%.
Such dynamics could play into the hands of a smallcap explorer such as British Columbia-focused Fabled Copper Corp. (CSE:FABL), which is advancing its 8,000 hectare (Ha) Muskwa property, which comprises no less than 22 documented copper occurrences on three blocks, and where sampling has regularly thrown up impressive grades.
In March this year, for example, the firm reported a whopping 28.30% copper on the Keays south showing, an area, which may become a priority drill target this summer. Fabled Copper has also reported samples of 25.6% copper at the 8A occurrence; 14.3% at Lady Luck; and 19.6% at the Mac showing.
Higher grades mean less rock needs to be hauled and lower costs in a mining scenario, which is likely to become particularly important in today's economic climate.
Proactive sat down with Fabled Copper's CEO Peter Hawley to talk about the company's recent public listing and the excitement surrounding its flagship asset.
Proactive: Fabled Copper was spun-out of Fabled Silver in December last year. Can you explain the rationale behind that move?
Peter Hawley: Fabled Silver's main focus of exploration was in Mexico for silver-based products and it also had the Fabled Copper properties in it. To be perfectly frank, it was the right time, right place. The price of copper started moving, the green revolution started, and financing was available. And with the financial backing, we said we will take these copper assets, which the shareholders receive zero value for, and for every five shares they own in Fabled Silver they get one free share in Fabled Copper, so they ended up owning 20% of the new company (Fabled Copper) and from there, the new entity would be all cashed up, brand new, assume its own risks and everything else. I think it's a win-win on both sides and expanded the market capitalization and also leveraged the financial world with two great metals.
Can you outline what you find so exciting about the Muskwa project?
There's the big picture and the small picture here. The big picture would be why, in an area of about four miles by six miles, do you have such a tremendous amount of copper mineralization? And a great majority of it being very high grade? That's a question that has yet to be answered.
The micro picture is that there are these numerous copper occurrences. Three, particularly come to mind. Two of these three have been developed and have tonnage on them. One was partially exploited before it was shut down due to the government and the other one was developed but never exploited. A lot of times you start off these exploration companies looking for a snip of copper but here you already have large tonnage defined and yet you still haven't figured out where all this copper is coming from. So, this is a great starting point.
Can you tell me about your successful exploration in 2021 at Muskwa and what you plan to do in 2022?
The most active period in this area was about from the mid-1960s to the mid-1970s. And that was basically because they put the Alaska Highway fairly close to it and allowed access. So during that time, you had the Magna mine enter production and you have the Davis Keays Eagle vein mine being developed along with a lot of surface exploration work. And then the price of copper was 70 cents a pound and the British Columbia government changed certain rules and put royalties on it - there was a hiatus and nothing happened.
Then, when people came back in they were looking regionally and would do airborne, geophysics or whatever. We rounded up all that paper data and started putting it into a GIS system (an electronic format in other words) and also last year's program was based on the results of looking at all the past historical work and where we should go or where we find interesting.
We were also working with six survey areas using drones and the drones were doing 3D imagery with an accuracy of three centimeters. And then on top of that we were looking at silica alteration, gossan alteration and so on. The whole point of doing all this is that we will create an almost 3D world with data points at the surface and the underground workings and that will define the stage for a drill program and this will be the first major drill program in 25 years. And last year's program was the first major program done in about 25 years too.
Are there any challenges of exploring at such a location as the Muskwa project?
A lot of people say you are really up high there (at 1,700 metres) but I've been on properties, in mines, in Peru at 3,800/ 4,000 metres. So that's a misconception. It isn't very high up there. I would say the biggest challenge is that your window of availability to do work is about four to five months. So your field exploration on the ground is limited and that is a challenge because you want to get as much done as possible. And certain things require permits. We started about three months ago planning this year's program and that will begin in June. That's how long in advance we had to start planning this because of the logistics.
Why is copper currently such a strategic metal?
There are two or three things. If you looked at the price of copper about four months ago, it would have been in the US$4.50 range. Yesterday (March 3, 2022), it was US$4.73. That's a huge move in the copper world. There are various reasons for this. Number one is LME (that's metal held in inventory). If that was to be given out on demand there would be about two days of copper in inventory in demand.
Number two is the big copper producers such as Chile and Peru. Those big open pits there have been in operation for a long time and they have to go deeper and the grade gets weaker. As they go deeper the great big trucks have to haul it to surface and the price of fuel has gone up over 35% so the grade becomes marginal because of the cost. So that's a huge effect. The thing about northern British Columbia is it's green, Canadian copper because underground mines don't have a footprint, or virtually no footprint, and we're not using big equipment so carbon output and footprint are affected by costs. It's a whole different matrix from a big open-pit copper mine.
What's the end game here? Do you get this project to a point where you sell it on or do you intend to mine it?
I have a history and people can look up my name if they want and they will see various mines that I have put into production. I personally am not up for that task - it takes a lot out of you! But I am sure given where the spectrum is in copper, that there'll be a lot of bigger fish looking for things such as we have with a very quick start-up. And as such, it would be a property of interest to one man or another, whether it be a joint venture, or just to take the company.
What news flow can investors expect in the near to mid-term?
On December 21, 2021, we started publicly trading Fabled Copper. In the first week of January 2022, we started coming out with a news release and we've been putting out every week a news release on a different copper occurrence consistently. There's also a movie on the website, which explains what is happening in layman's terms. We have enough things in the data bank that I can continue to talk about new copper and occurrences probably every week until about the end of June of this year. So when I say there's a lot of copper in that area, there is a lot of copper! It's hard to believe.
Contact the writer@proactiveinvestors.com